{"id":26640,"date":"2015-03-17T01:00:05","date_gmt":"2015-03-17T05:00:05","guid":{"rendered":"http:\/\/quotulatiousness.ca\/blog\/?p=26640"},"modified":"2015-03-10T07:14:34","modified_gmt":"2015-03-10T11:14:34","slug":"qotd-subjective-economic-value","status":"publish","type":"post","link":"https:\/\/quotulatiousness.ca\/blog\/2015\/03\/17\/qotd-subjective-economic-value\/","title":{"rendered":"QotD: Subjective economic value"},"content":{"rendered":"

Properly understood, all economic values are subjective. Some items have useful applications, but the relative value of those applications is itself subjective; there\u2019s nutritional value in a pound of cauliflower, and there\u2019s nutritional value to an ounce of Beluga caviar, and the difference in the price between the two is based on no objective criterion. Even scarcity does not explain the difference: There are more diamonds in this world than there are autographed photos of Anthony Weiner, but try giving your wife the latter for your anniversary and you\u2019ll get a short and possibly violent lesson in the subjectivity of value. In fact, it is the subjectivity of value that makes exchange possible \u2014 if our values and preferences were perfectly aligned, we\u2019d never trade anything for anything else, because we\u2019d all value every item and service at precisely the same level, and there would therefore be no incentive to engage in commerce. That our preferences should be non-uniform ought not be surprising \u2014 our lives are non-uniform, too. If I operate an apple orchard, I am probably not going to buy apples from you at any price, unless perhaps they are a different sort of apple than the ones I grow. The rancher and the fisherman each assigns a different value to beef and fish than does his opposite number. Disagreement is fundamental.<\/p>\n

The crude version of exchange \u2014 which is, unhappily, the common version \u2014 is inclined to suspect that there is an objectively correct price for a good, and that profit comes from duping somebody into paying more than the correct price for it. That error is fundamental to Marxism and other anti-capitalist philosophies, and it is implicit in such social phenomena as the anti-advertising movement, \u201cBuy Nothing Day,\u201d and similar political tendencies. But that bias does relatively little harm in the heads of greying Marxists, peddlers of \u201cprofit is a crime\u201d banalities, and Occupy riff-raff. Where it is truly destructive is in the disorganized thoughts of the large majority of ordinary people with no particularly strong political commitments or economic orientation. Consider these phrases: \u201cAn honest day\u2019s work for an honest day\u2019s pay,\u201d \u201cjust wages,\u201d \u201cfair price,\u201d \u201cobscene profits,\u201d \u201cprice gouging,\u201d \u201cexcessive executive compensation.\u201d For any of those phrases to have any intellectual content, then there must be a price that is in some non-subjective sense the correct one. But if economic values are subjective \u2014 and they are \u2014 then \u201can honest day\u2019s work for an honest day\u2019s pay\u201d can only mean one thing, that being the payment of an agreed-upon wage for an agreed-upon performance of labor, with \u201chonest\u201d referring only to the fulfillment of the agreement and saying nothing substantive about the terms of the agreement itself.<\/p>\n

Kevin D. Williamson, “The Profit Police”, National Review<\/em><\/a>, 2014-06-30.<\/p><\/blockquote>\n","protected":false},"excerpt":{"rendered":"

Properly understood, all economic values are subjective. Some items have useful applications, but the relative value of those applications is itself subjective; there\u2019s nutritional value in a pound of cauliflower, and there\u2019s nutritional value to an ounce of Beluga caviar, and the difference in the price between the two is based on no objective criterion. […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[25,74,41],"tags":[780,95],"class_list":["post-26640","post","type-post","status-publish","format-standard","hentry","category-economics","category-food","category-quotations","tag-communism","tag-jobs"],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p2hpV6-6VG","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts\/26640","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/comments?post=26640"}],"version-history":[{"count":1,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts\/26640\/revisions"}],"predecessor-version":[{"id":26641,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts\/26640\/revisions\/26641"}],"wp:attachment":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/media?parent=26640"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/categories?post=26640"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/tags?post=26640"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}